2019 HIGHLIGHTS
- On
March 29, 2019 , ECREIT completed the acquisition from Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") of 2,091 residential suites, creatingCanada's first European-focused multi-residential REIT with an initial portfolio value of €443 million. - Effective
March 29, 2019 , the REIT entered into a new asset management agreement with CAPREIT, as well as property management agreements and a pipeline agreement pursuant to which during 2019 the REIT acquired from CAPREIT a total of 65 additional properties, representing an aggregate of 2,710 residential suites acrossthe Netherlands . - Also during 2019, the REIT acquired an additional 26 properties from third party vendors, comprising in total 831 residential suites and ancillary commercial space located in
the Netherlands . - By
December 31, 2019 , the value of the REIT’s property portfolio increased to €1.3 billion, consisting of €1.2 billion in multi-residential properties located inthe Netherlands and €0.1 billion in commercial properties inGermany ,Belgium andthe Netherlands . - Successfully completed the REIT's first public offering on
September 24, 2019 , and issued 40,185,000 trust units ("REIT Units") atC$4.15 per REIT Unit for aggregate gross proceeds ofC$166.7 million , including the exercise in full of an over-allotment option, through a syndicate of underwriters led byRBC Capital Markets and Scotiabank. - Completed a second public offering on
December 18, 2019 , issuing a further 30,915,400 REIT Units atC$4.65 per REIT Unit for aggregate gross proceeds ofC$143.8 million , including both an upsize and the exercise in full of an over-allotment option, through a syndicate of underwriters led byRBC Capital Markets . - NOI increased by 214% and 114% for the three months and year ended
December 31, 2019 compared to the same periods last year, primarily due to contribution from acquisitions during the period, higher monthly rents and reduced property operating costs driven by lower repairs and maintenance costs and lower property management fees on stabilized properties. - High, stable occupancy rate of 97.2% for residential properties and 99.8% for commercial properties as at
December 31, 2019 . - In connection with the creation of the REIT, on
April 24, 2019 a special distribution of €0.33 (C$0.50 ) per REIT Unit was paid to REIT Unitholders (excluding CAPREIT) of record as atApril 5, 2019 , and onJuly 15, 2019 , a quarterly distribution of €0.02625 per Unit (including both REIT Units and Class B LP Units as defined below, equivalent to €0.105 per Unit annualized) in respect of the second quarter of 2019 was paid to Unitholders of record as atJune 28, 2019 . - Effective with the start of the third quarter, the REIT changed from paying quarterly distributions to paying monthly distributions of €0.00875 per Unit (equivalent to €0.105 per Unit annualized).
- As at
December 31, 2019 , CAPREIT owns 66% of the combined issued and outstanding Units of the REIT, decreased from its initial ownership of 83% onMarch 29, 2019 resulting from the reverse takeover. - Achieved a ranking on the 2020 TSX Venture 50 as a top performer on the
TSX Venture Exchange .
"2019 was ground breaking for ERES as we set out in pursuit of growing our high quality, multi-residential property portfolio and successfully more than tripled its value in the nine months since creation of the REIT", commented
ACQUISITIONS OF NEW RESIDENTIAL PROPERTIES FUEL GROWTH
For the three months ended
Net Operating Income ("NOI") was €11.9 million for the three months ended
Funds from Operations ("FFO") for the three months and year ended
STRONG AND CONSERVATIVE FINANCIAL POSITION
As at
"Our robust financial position, strengthened during the year from our ability to obtain low interest rate debt financing along with the successful completion of our two recent equity offerings, has provided us with the financial footing needed to secure acquisitions at attractive yield spreads", added
SUBSEQUENT EVENTS
On
DISTRIBUTIONS
At a Special Meeting of Unitholders held on
CONFERENCE CALL
A conference call hosted by
A slide presentation to accompany Management’s comments during the conference call will be available an hour and a half prior to the conference call. To view the slides, access the ERES REIT website at www.eresreit.com, click on “Investor Relations”, and follow the link at the top of the page. Please log on at least 15 minutes before the call commences.
The telephone numbers to listen to the call after it is completed (Instant Replay) are local/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 2043785#. The Instant Replay will be available until midnight,
FINANCIAL AND OPERATING HIGHLIGHTS
Financial Highlights
Three Months Ended | Year Ended | |||||||||||
2019 ¹ | 2018 ¹ | 2019 ¹ | 2018 ¹ | |||||||||
Portfolio Performance | ||||||||||||
Residential Occupancy 2 | 97.2 | % | 98.7 | % | ||||||||
Residential Net AMR 2 | € | 844 | € | 840 | ||||||||
Number of residential units 2 | 5,632 | 2,091 | ||||||||||
Commercial Occupancy 2 | 99.8 | % | N/A | |||||||||
Commercial Net ABR 2 | € | 17.0 | N/A | |||||||||
GLA of commercial properties (sqf) 2 | 508,002 | N/A | ||||||||||
Operating Revenues (000s) | € | 15,809 | € | 5,350 | € | 41,481 | € | 20,770 | ||||
NOI (000s) | € | 11,899 | € | 3,790 | € | 31,519 | € | 14,748 | ||||
NOI Margin | 75.3 | % | 70.8 | % | 76.0 | % | 71.0 | % | ||||
Financial Performance | ||||||||||||
FFO per Unit – Basic 3, 4 | € | 0.032 | € | 0.027 | € | 0.136 | € | 0.118 | ||||
AFFO per Unit – Basic 3, 4 | € | 0.028 | € | 0.027 | € | 0.120 | € | 0.117 | ||||
Liquidity and Leverage | ||||||||||||
Total Debt to Gross Book Value 2, 5 | 45.9 | % | 46.5 | % | ||||||||
Weighted Average Mortgage Effective Interest Rate 2, 6 | 1.64 | % | 2.02 | % | ||||||||
Weighted Average Mortgage Term (years) 2 | 5.32 | 5.31 | ||||||||||
Debt Service Coverage (times) 7 | 3.15 | 3.42 |
1 Prepared as a continuation of
2 As at
3 These measures are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or companies
4 Includes Class B LP Units.
5 Gross book value is defined as the gross book value of the REIT's assets as per the REIT's financial statements, determined on a fair value basis for investment properties.
6 Includes impact of deferred financing costs, fair value adjustment and interest rate swaps.
7 Based on trailing four quarters.
Three Months Ended | Year Ended | ||||
2019 | 2018 | 2019 | 2018 | ||
Other Measures | |||||
Weighted Average Number of Units - Basic 1 (000s) | 203,992 | 81,641 | 141,041 | 81,641 | |
Closing Price of REIT Units 2, 3 | € | 3.19 | N/A | ||
Closing Price of REIT Units (in C$) 2 | $ | 4.65 | N/A | ||
Market Capitalization (millions) 1, 2 | € | 735 | N/A | ||
Market Capitalization (millions in C$) 1, 2 | $ | 1,072 | N/A |
1 Includes Class B LP Units.
2 As at
3 Based on the foreign exchange rate of 1.4583 on
ERES’s Management Discussion and Analysis and Audited Financial Statements can be found at www.eresreit.com or www.sedar.com.
About
ERES is an unincorporated, open-ended real estate investment trust. ERES's REIT Units are listed on the
ERES’s registered and principal business office is located at
For more information please visit our website at www.eresreit.com.
For further information:
Chief Executive Officer | Chief Financial Officer |
Email: p.burns@eresreit.com | Email: s.cryer@eresreit.com |
Certain statements contained in this press release constitute forward-looking statements within the meaning of applicable Canadian securities laws which reflect ERES’s current expectations and projections about future results. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intent”, “estimate”, “anticipate”, “believe”, “consider”, “should”, “plans”, “predict”, “estimate”, “forward”, “potential”, “could”, “likely”, “approximately”, “scheduled”, “forecast”, “variation” or “continue”, or similar expressions suggesting future outcomes or events. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Any number of factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although ERES believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect. Accordingly, readers should not place undue reliance on forward-looking statements.
Except as specifically required by applicable Canadian securities law, ERES does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. These forward-looking statements should not be relied upon as representing ERES’s views as of any date subsequent to the date of this press release.
ERES uses financial measures regarding itself, such as adjusted funds from operations, that do not have standardized meaning under the International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures presented by other entities (“non-IFRS measures”). Further information relating to non-IFRS measures, is set out in ERES’s management information circular dated
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